Today we are continuing our focus on employee turnover, one of the biggest unreported expenses in business. These costs — direct and indirect — are very real and cut into profits and reduce shareholder value.

Why then do we seem to tolerate it? Why do most boards and far too many senior leaders pretend it does not exist, or that there is no real cost to the organization?

In yesterday’s blog post: “MEMO TO CEO CANDIDATES: Your Employee Turnover Rate Matters” that appeared on JohnGSelf.Com and LinkedIn, we wrote that recruiters are increasingly zeroing in on this issue. For CEO’s with a high turnover rate, beware: this is an issue that speaks directly to the quality of your leadership.

In this new job market that places a premium on value contribution, problems with employee turnover is not a record of accomplishment that will advance your candidacy. Dodging the question, or trying to pivot to another issue in an interview will not work.

What is so frustrating is that the problems that cause employee turnover are not that hard to fix unless the organization’s employer culture is broken and the CEO suffers from a malignant form of lack of self awareness.

Over the weekend I ran across two articles penned by Dr. Travis Bradberry, President of TalentSmart. He is the author of Emotional Intelligence 2.0. 

The mistakes companies make that drive away their best employers is a major concern. Few things are as costly or as disruptive as good people walking out the door, Dr. Bradberry writes.

A foundational issue driving this turnover is lack of employee engagement. In yesterday’s post I reported that CEB, a data firm, estimates that one-third of employees are disengaged from their employer and are already looking for a new job. The Gallup organization, which looks at this issue every year, recently reported that a staggering 70 percent of US workers are not engaged with their work.

This lack of employee engagement is not a new trend. Gallup and other organizations in this field have reported that this shockingly high number of unengaged employees has been a serious issue for years.

A highly engaged workforce means the difference between a company that outperforms its competitors and one that fails to grow, according to the Gallup report

Dr. Bradberry astutely observes that executives tend to blame turnover problems on everything under the sun but the truth is people don’t leave jobs, they leave managers.

If you are in an industry feeling the rapid impact of changing market conditions like retail or healthcare, you cannot afford to lose your best people if you hope to survive.

Moreover, turnover damages an organization’s recruiting brand. Companies with a bad reputation — a sullied recruiting brand — are less likely to attract top performers which contributes to a death spiral.

The question for many CEOs is this: If our employees are truly our most valuable asset, then why do we treat them with such indifference? Why do we seem content to keep making the same eight or nine mistakes that contribute to the lack of engagement and turnover?

Let’s look at Dr. Bradberry’s lists of things managers or senior leaders do to send people packing.

  1. They overwork their people. Nothing burns out good employees like overworking them. Stanford researchers find that productivity drops like a rock when the workweek exceeds 50 hours.
  2. They don’t recognize contributions and don’t reward good work. We underestimate the value of a pat on the back. We all like to be praised for our work, especially the star performers, but as a leader you need to listen to find out what lights their motivational fire.
  3. They treat everyone equally. Dr. Bradberry says this concept may be fine for school children, but it is a disaster in the workplace. If you treat your top performers the same way you treat your poorest workers who seem to be content with just showing up and going through the motions, you are telegraphing a bad message: your performance does not matter.
  4. They tolerate poor performance. A jazz band is only as good as the worst player, Dr. Bradberry writes. It does not matter how great some members of the team may be, everyone hears the worst player. Poor performers who are allowed to continue without consequences, will drag down the rest of the band members.
  5. They don’t care about their employees. More than half of the people who leave their jobs do so because of their relationship with their boss.
  6. They don’t honor their commitments. Making promises to people is a two-edged sword. When you keep your commitments you grow in the eyes of your employees. When you don’t, they exit sooner rather than later.
  7. They hire and promote the wrong people. Top employees want to work with people who are equally talented and productive. Working alongside a mediocre performer is frustrating. It is even worse when that mediocre employee is promoted.
  8. They don’t let people pursue their passions. Top performers are passionate about what they do. Allowing those employees to pursue their passions — versus keeping them under control in a tight little box — improves productivity. If you don’t give them that freedom, they will leave. If you do, you will see more creativity, more value and greater engagement.
  9. They fail to develop people’s skills. Employee development is not an expense, it is an investment. If you do not invest in this important asset, do not be surprised when they leave to go work for someone who will.
  10. They don’t make things fun. If people aren’t having fun at work, you are doing it wrong. People do not give their all unless they are having fun. The best companies to work for in the US know that it is a smart engagement strategy to loosen things up a little.